How Employers Can Reduce the Financial Burden of COVID-19

Three Key Webinar Takeaways

The unprecedented economic impact of COVID-19 has had severe implications for workers earning low to moderate incomes (LMI)—many of whom are increasingly looking to their employers for support. At Commonwealth, we’ve heard from employers, financial institutions, fintechs, and others looking for guidance and resources to help them in their efforts. 

On Thursday, March 26, we hosted our first of a series of webinars—“How Employers Can Reduce the Financial Burden of COVID-19”— to discuss these issues and share potential solutions to the unique and unprecedented challenges employers are facing today. Our panelists, Mariel Beasley, Principal, Common Cents Lab, Timothy Flacke, Co-Founder and Executive Director, Commonwealth, and John Thompson, Chief Program Officer, Financial Health Network—all partners in BlackRock’s Emergency Savings Initiative—collectively brought decades of experience in research, innovation, behavioral science, and policy in financial security and opportunity. Moderated by Commonwealth Director Brian Gilmore, the group shared key insights and surfaced practical strategies in response to a wide range of employer questions. Attendees came from a variety of industries and business sizes, including financial institutions, nonprofits, and employers from a variety of sectors.

As we mentioned in the webinar, COVID-19 is not impacting all businesses or industries equally, and there is no single one-size-fits-all solution. Some businesses, like grocery stores, are hiring or increasing hours to meet surge demands, while many others, like airlines and restaurants, have had to halt services, cut back hours, or lay off workers. Fortunately, between federal programs, grassroots and charitable efforts, and efforts employers can take internally, there are many ways to address short- and long-term challenges being felt most acutely by low-to-moderate income workers.

Together, the panelists identified many ways employers can support their workers earning lower incomes by both providing immediate relief and helping them weather the longer storm.


Three Key Takeaways for Employers

1. Help Employees Best Manage their Cash Assistance Windfall

Employers “have a unique understanding of who within [their] employees may qualify to receive cash assistance” from the federal government, and can “proactively reach out to folks in personalized ways,” said Mariel Beasley. Informing employees on how they will receive the money if they do qualify, as well as advising them to set aside time with their household to plan the use of the check, goes a long way for employees who have a lot on their plates. According to Mariel, behavioral economics has shown that operating under financial scarcity can cause difficulty concentrating and making decisions equivalent to that experienced after losing a full night of sleep. Supporting employees in making financial decisions in this time of increased scarcity can alleviate some of that burden.

2. Boost Savings for Employees and Make Saving as Easy as Possible

The panelists agreed that savings are still important, even now. The key is “helping people to take action and focusing on the behavior and not the size,” said Timothy Flacke. Building even a small liquid fund can provide a much-needed cushion. To that end, seeding savings accounts or offering innovative features like prize-linked savings gives direct financial support to employees, motivates them to start and continue saving, and provides immeasurable peace of mind.

3. Support Your Hardest-Hit Employees by Offering Hardship Funds

In a study Commonwealth co-authored with The Aspen Institute, Illuminating the Hidden Safety Net, we found that these programs are no longer niche: large corporations such as Levi’s are offering access to hardship funds to their workers. Hardship funds that are “rapid, respectful, and fair,” said Timothy Flacke, provide quick support to employees facing financial emergencies. As John Thompson noted, Financial Health Network “has seen changes to human resources policies that tilt more towards trusting the employee” during this crisis, and providing hardship funds is a great way to demonstrate and build trust with employees. 


With these steps and new programs being offered in the face of this crisis, employers have several evidence-backed steps to bring to their workers. We look forward to seeing how employers collaborate and develop new, creative ways to support their most vulnerable employees through this time.

Commonwealth is continuing to monitor the coronavirus outbreak’s impact on financial security. To stay informed, check out our COVID-19 page for the latest news, insights and resources; you can also subscribe to our newsletter to receive weekly updates and learn about our upcoming COVID-19 webinar series.